The Health Care Crisis

The US spends more than $3 trillion on a horrendous healthcare system every year. That’s a staggering number. It’s tough to even understand what that means.

The healthcare system is one of the biggest impediments to progress. It is devastatingly complex with many incentives that are at odds with general health.

I Owe the Hospital What?

The cost of health care is devastating families across the country and destroying the federal budget.

The astronomical costs are an enormous drain on our collective well-being. It affects just about every corner of society.

We need to fix this broken system of health care if we ever want to see real progress in our society.

The Health Crisis in America

The health crisis in America is a very real and pressing issue. The costs of health insurance and health care are astronomical and are crippling our society.

Companies (i.e. hospitals and other health care providers, insurance companies, and drug companies) get rewarded not when you are healthy, but when you stay sick. Our society is being dragged down by the ever-increasing costs of health care.

It’s a huge drain on households as well as the federal budget.

We all know it, we all talk about it, but it just gets worse

Politicians have been going on and on about lowering healthcare costs for decades. But every year it just gets worse and worse. If we don’t figure out a way to bring the cost of health care down we are all in big trouble.

That Time the Rich Guys Tried to Fix It

Back in 2018, three of the biggest corporations in the US (Amazon, J.P. Morgan Chase, and Warren Buffett’s Berkshire Hathaway) teamed up to pool their resources and pretend like they were going to do something about healthcare costs. The promise was that the solutions they came up with could be adopted in society as a whole. The media was in a real tizzy.

“Amazon, Chase, and Berkshire Hathaway partner up to disrupt health care”

-NBC news.

“Jeff Bezos, Warren Buffett and Jamie Dimon want to fix health care”

-CNN.

As Warren Buffet said: “The ballooning costs of health care act as a hungry tapeworm on the American economy… We share the belief that putting our collective resources behind the country’s best talent can, in time, check the rise in health costs while concurrently enhancing patient satisfaction and outcomes.” [Emphasis mine]

They gave up less than three years later, after spending roughly $100 million combined (WSJ). No real explanation.

These are among the most powerful corporations on the planet. They have the most money and the smartest people working for them.

If they are helpless to bring down costs, what hope do we have?

What’s so frustrating is that we have plenty of ways to bring down costs. Knowing what to do isn’t the problem.

There are Plenty of Ideas to Bring Down the Cost

A million ideas are floating around on how to bring down healthcare costs. Obamacare was supposed to bring down costs. Trump did a few things that were supposed to bring down costs. Biden has some nonsense his admiration is paying lip service to. Every member of congress has a list of stuff they pull out on the campaign trail and forget about once they are in office.

Identifying effective ways to bring down costs isn’t the problem.

Do Problem is We Don’t Do Anything

Elected officials aren’t doing anything to bring down costs – their corporate owners won’t let them.

Trump, Obama, and Biden, not to mention most senators and the bulk of members of the house all ran on bringing down costs for care. You’ll find bringing down the cost of health care as a major goal of just about every political campaign of the past two or three decades. But like most things that rely on the government, it just gets worse and worse.

Health Care Reform is not a Partisan Issue

Everyone wants the same thing, lower costs!

For some reason, health care has become a partisan issue. It doesn’t have to be this way. We can all work together and demand better from our healthcare system.

Problems with the Healthcare system

What is wrong with the health care system?

We all know the problems of our health care system. As JP Morgan Chase CEO Jaime Dimon wrote in his 2020 letter to shareholders

“the problems associated with healthcare are serious, rampant and obvious. Our costs are more than twice those of the developed world without justification by better outcomes. There is no transparency in pricing, with patients legitimately complaining of hidden costs. And chronic care is not necessarily managed properly. More than 30 million Americans are uninsured, and we are falling short in basic wellness.”

This is stuff we’ve been talking about forever.

We pay the most for terrible results

The US spends much more on health care than the rest of the world.

This chart is from How do Healthcare prices and use in the U.S. compare to other countries? from KFF Health System Tracker. Other highlights from their report include:

  • We have fewer physicians per capita
  • We have the fewest visits to the doctor per capita
  • We stay in the hospital for significantly less time
  • We perform more MRIs and they are more expensive
  • The price of an appendectomy is at least double the average
  • The cost of arthritis drug Humira was twice as much as in the UK

And so forth, and so on. You get it..

Health Care is a Massive Drain on the Federal Budget

The healthcare system in the United States is a drain on the ridiculous federal budget. It is one of the biggest contributors to our national debt. The high costs of healthcare are a burden on our economy and our citizens. The healthcare system is broken. It is controlled by a few giant corporations that have a vested interest in keeping prices high.

It’s Putting People in the Poor House

Two-thirds of all personal bankruptcies are due to medical bills according to Spend me not. That’s way more than half of all bankruptcies. Not great.

We’ve Created Distrust in the Healthcare System

About 320 people search Google for “I don’t trust doctors anymore” each month. Given how many people there are I guess that number isn’t that high… But still. We see all this corrupt stuff floating around, these perverse incentives for more procedures and drugs, and people stop trusting the medical profession. That’s one of the things that made Covid worse. People had legitimate concerns about the people running the show. Whether the distrust is misplaced or not is beside the point. The point is that it’s there.

We are Unhealthy as a Society

Not only is it crazy expensive, but we’re still incredibly unhealthy as a society.

We have some of the worst health outcomes in the developed world. We are ranked 37th in the world in life expectancy. We are ranked 31st in infant mortality. Drug addiction is a real problem, leading to more violent crime.

 

The healthcare system is broken and it is crushing our society. It is time for change. We need to demand better from our elected officials

 

Of course, the biggest problem, what fuels and reflects it all, is the high cost

The High Cost of Healthcare

Healthcare costs are huge, have been rising steadily for years, and show no signs of slowing down. This is devastating for families and individuals who are struggling to make ends meet. The high cost of health care in the United States is a burden on our economy and is making it difficult for businesses to compete.

Prices Don’t Make Sense

The cost of health care in the United States is ridiculous. A large part of the problem is that prices for healthcare services are opaque. There is no way for consumers to know how much a service should cost, so they are at the mercy of providers. And since insurance often ends up paying some of the bills, and because getting details is all but impossible, fewer consumers are doing the hard work of comparing prices and finding ways to cut costs as you have in most sectors of the economy.

This lack of transparency allows providers to charge whatever they want.

This opacity also extends to health insurance. Consumers have no way of knowing how much their health insurance should cost them. This is because insurers negotiate prices with providers in secret, and those prices are arbitrary. Even worse, health insurance companies often change the prices they charge consumers without telling them.

All of this results in health care costs that are skyrocketing. In 2017, the average cost of health insurance was $18,000 for a family of four. That’s an insane amount of money, especially for the terrible product you get. And

it is only going to get worse.

Health Care Billing Horror Stories

We see these insane healthcare billing stories pop up all the time. Indecipherable bills for staggering amounts ruining people’s lives. Kaiser Health News keeps a Bill Of The Month featuring some of the worst offenders. As I’m writing this it features an ambulance ride that was almost half a million dollars (miraculously, the bill disappeared once the press started asking questions ) and an $80,000 bill for having twins.

In both these cases, the patients had health care!

There are endless stories about insane healthcare charges, here are a few more:

And Healthcare Costs Keep Rising…

And the worst part is that these costs just keep going up to ever-higher highs. There’s no reason to think that’s going to change.

We know it’s a problem. People keep bitching, politicians keep flapping their gums, technology is improving, and treatment is getting smarter… We’ve got Artificial Intelligence and Gene Therapy and on and on.

But prices just keep going up!

Why?

Reasons for Rising Health Care Costs

There are many reasons for increasing healthcare costs, but it all comes down to one thing: the system is rigged against us. At the end of the day, that’s the real problem. That the current system keeps funneling more and more money from the middle and lower class to the top. And the wealthy like it when they get wealthier and have the power to prevent any meaningful change.

There are many contributors to the high costs, including the following:

  • The powers that be like the fat profits they are getting and won’t let anyone mess with their cash cow. The healthcare industry is controlled by a few giant corporations that own the elected officials that matter. They have all the power and they use it to line their own pockets.
  • Our elected officials are in their pockets and are too chickenshit to do anything besides run their mouths.
  • The corporately controlled media gets a big chunk of their advertising dollars from the healthcare industry, so they just promote the current system.
  • The healthcare system is extremely complex, and this complexity results in inefficiency and waste, driving up costs.
  • The healthcare system is fragmented, with each provider operating independently. This fragmentation leads to duplication of services, as well as gaps in care.
  • There are numerous healthcare providers, including hospitals, doctors, clinics, and pharmacies. All of these providers must be coordinated to provide care to patients. This coordination is often done poorly, leading to duplication of services and tests, and delays in care.
  • In addition, the administrative costs associated with the health care system are high. For example, billing and coding is a complex and time-consuming process. This complexity results in errors and waste.

The bottom line is that the health care system is complex and inefficient, which drives up the cost of health care.

 

Medical Billing Fraud

Medical fraud, especially in Medicare and Medicaid, is another big driver of costs. Some government agencies place the financial losses due to healthcare fraud at “more than $300 billion” according to the National Health Care Anti-Fraud Association. That number seems crazy but either way I’m sure with billions sloshing around the healthcare sector, and the government writing the checks, there’s a lot of cash up for grabs.

What is considered fraudulent billing?

Billing for services that were not provided including upcoding, unbundling, or fraudulent diagnosis. Who knows.

Can we Check if doctors are… doctors…

In July of 2019, ProPublica ran a story about a personal trainer who “spent years posing as a doctor and billing the nation’s top insurers, making off with millions.” ProPublica found it was “absurdly easy” to commit health care fraud and that it “could be costing Americans hundreds of billions of dollars a year” link.

In part because of the ProPublica Report, four Senators introduced the bipartisan Medical License Verification Act to require

“the Department of Health and Human Services to implement an automated system to verify whether an applicant for a unique health identifier has a valid state license to practice in a health care profession before providing the applicant with such an identifier.”

Seems like a simple enough rule, especially if it could help save us billions. But they just introduced it, nothing else ever happened (see for yourself at Congress.gov). Because the government is broken.

You can read the blowhard press release with the four asshats bullshitting about how important it is here.

But talk is cheap, but if they have to do stuff… They don’t do shit.

High Drug Prices

The high cost of drugs is another major reason health care is so expensive. There are several causes of high drug prices.

  • The FDA approval process is lengthy and costly, which results in higher drug prices.
  • Pharmaceutical companies have a monopoly on many drugs, and they use this monopoly to charge high prices.
  • The cost of research and development for new drugs is high, and these costs are often passed on to patients in the form of higher drug prices.
  • The healthcare system itself contributes to high drug prices. For example, hospitals mark up the price of drugs, and insurance companies negotiate higher prices with drug companies.

The bottom line is that the high cost of drugs is a major problem in our society, and there are many causes of these high prices.

The Medical Patent System

The drug patent system is another contributor to high costs. The system rewards companies for developing new treatments and procedures, but these treatments often come with high price tags. Patent protection allows these companies to charge whatever they want for their products, and patients are often forced to pay the bill. Patent reform is desperately needed if we want to bring down healthcare costs and make progress on this issue.

Taxpayers Subsidize Drug Research

One of the many frustrating aspects is that as much as drug companies complain about the costs of research and bringing drugs to market, taxpayers subsidize drug research in many ways.

National Institutes of Health (NIH)

One way we taxpayers subsidize drug research is through the National Institutes of Health (NIH), which is the largest public funder of biomedical research in the world. The NIH invests about $32 billion a year in medical research, much of which goes toward drug development.

Drug Research at Colleges and Universities

Another way taxpayers subsidize drug research is through colleges and universities. Drug companies often partner with academic institutions to conduct clinical trials of new drugs. These trials are expensive, and the costs are often borne by taxpayer-funded institutions.

Tax Breaks for Drug Companies

The federal government also provides tax breaks for drug companies. The most notable tax break is the Research and Development Tax Credit, which allows companies to deduct up to 20 percent of their research and development costs. This tax credit costs taxpayers billions of dollars every year.

Subsidies for Drug Companies

The federal government also provides direct subsidies to drug companies. One program, known as the Orphan Drug Tax Credit, provides tax credits to companies that develop drugs for rare diseases. The credit can be worth up to 50 percent of the research and development costs of the drug. I don’t know if this is a good or a bad thing, just pointing it out.

Another program, known as the Qualifying Therapeutic Discovery Project Tax Credit, provides tax credits to companies that are developing treatments for certain medical conditions. Again this might be a good idea, just pointing out ways we subsidize drug research costs.

The FDA’s Drug Approval Process

Another way that taxpayers subsidize drug research is through the FDA’s drug approval process. The FDA’s 2022 budget is $6.5 billion. The FDA is responsible for ensuring that drugs are safe and effective before they can be sold to the public. The drug approval process is lengthy and expensive, and it often takes years for a new drug to make it to market. Can you imagine how many lawyers and researchers (but mostly lawyers) go into making a drug?

Medicare and Medicaid Programs

Taxpayers also subsidize drug research through the Medicare and Medicaid programs. These programs provide health insurance to millions of Americans, and they also cover the cost of prescription drugs. In addition, Medicare Part D, which is the prescription drug benefit program for seniors, is funded by taxpayers.

These programs represent just a fraction of how taxpayers subsidize drug research.

The bottom line is that taxpayers are footing a large portion of the bill for drug research and development, and they are not seeing the full benefits from these investments.

We still pay through the nose!

The costs of prescription drugs are skyrocketing, and the broken healthcare system is to blame. Drug companies have been able to increase prices without any justification, and patients are bearing the brunt of these costs. The problem is only getting worse, and something needs to be done to fix it.

Why Are High Health Care Costs a Problem?

There are a million reasons the high costs are a problem. For one, it’s just a big waste of resources to reward the wrong things. We could be spending money we spend on healthcare on education, infrastructure, paying down debt, or anything else that would make our society better. Instead, we’re just flushing taxpayer money down the drain, making rich people richer.

The Impact of the High Cost of Health Care

The high cost of health care and health insurance has a devastating impact across the country. The following are some of how the high cost of health care is harming our society:

  • The high cost of health care and health insurance leads to financial insecurity for many people. This insecurity can lead to anxiety, crime, depression, and even suicide.
  • The high cost of health care and health insurance also results in medical bankruptcy. This is a major problem in our society, as it can ruin people’s financial lives. They often “drop out” of society, unable to pay rent and keep a job.
  • High costs mean that many people cannot afford to see a doctor or get the care they need. This can lead to poor health and even death.
  • It is a major drag on our economy. Money that is spent on health care could be spent on other things, such as education, infrastructure, or research and development.
  • Unnecessary spending means that many people can’t afford necessities, such as food and shelter. This can lead to homelessness and poverty.

The bottom line is that the high cost of health care and health insurance is having a devastating impact on our society. This problem is complex, and there are no easy solutions.

However, it is clear that something, many things, must be done to address this issue. Otherwise, the broken healthcare system will continue to crush our society.

It Can Seem Insurmountable

The problems are so entrenched that it’s almost impossible to make changes.

The health care system itself is the cause of the problems with health care.

If we’re going to get to the bottom of anything, we need to ask the only question that matters.

 

Who Profits from Health Care?

Where does the money go?

We all pay and pay and pay… Where does the money end up? What are the stops along the track once the dollar gets taken out of your paycheck?

Many sectors profit from health care. These include the pharmaceutical industry, the insurance industry, and the hospital industry. They each take a bite of the pie, and certainly, some of the work they do is productive.

But you have to wonder how much of the system is working to provide good results vs how much is just gumming up the works. Each of these industries has a vested interest in keeping the healthcare system complex and expensive. The higher the costs, the more money flows through the system, and the more they can skim off the top.

Drug Companies

The pharmaceutical drug industry profits from the sale of drugs. So many people are on medication! Many need it, and clearly, drugs make some people’s lives better. But they are crazy expensive. And when Medicare or Medicaid pays for it, nobody is asking questions about costs and we just flush money down the toilet. The higher the price of drugs, the more profit for pharmaceutical companies.

Insurance Companies

The insurance industry profits from the sale of health insurance policies.  Given the high costs, you pretty much need to have insurance these days. Especially if you have kids. The higher the premiums and the less they pay, the more profit for insurance companies.

Hospitals and Care Providers

The hospital industry profits from the provision of healthcare services. Hospitals, doctors’ offices, those walk-in clinics you’re seeing more and more of. They all take their cut. The higher the prices, the more profit for hospitals.

Hospitals are Merging

And hospitals are conglomerating. Pretty soon all the hospitals in the country are going to be owned by like three companies with regional monopolies. And THEN see what they do to costs.

Lobbyist

The healthcare system is also supported by a powerful lobby. The health insurance industry, the pharmaceutical industry, and the hospital industry all have powerful lobbying groups that work to protect their interests in Washington. They are part of that whole “money runs all of Washington” thing. Lobbyists are handsomely rewarded for their efforts to keep the money flowing to the top.

Finance Professionals / Investors

Speaking of money flowing to the top, banks and Wall Street firms make billions of dollars every year from healthcare companies. They do this by investing in healthcare companies and providing them with loans. The finance industry also benefits from the high cost of health care because people have to take out loans to pay for health care. This creates a lot of debt for people, which the corrupt finance industry profits from.

The Government

Don’t forget the government itself as an administration employs a ton of people in the healthcare world and spends billions of our money on healthcare. In 2017, the government spent $1.1 trillion on health care. Our tax dollars. This is about one-fifth of the total Federal budget. And it all just swims around in this giant pit of despair.

So, Who’s Left?

The answer is: you and me. We are the ones who are footing the bill for this broken system. We are the ones who are paying more and more for health care, while our quality of life decreases. We are the ones who are struggling to make ends meet, while the healthcare industry profits

Do you Know Who’s Not Getting Rich Off Health Care?

Nurses are not getting rich off healthcare

The guys and gals out there wiping buts, taking our temperature, and overall keeping us alive. Surely some of the money we’re giving away to everyone else would be more effectively spent on nurses and care?

Doctors don’t even get that much relative to the money sloshing around.

Sure doctors get paid well, but not what the CEOs of these extractive sectors make.

And they work hard and keep us alive!

It’s Just a Broken, Broken System

The broken healthcare system is crushing our society. It is time for reform. We need a healthcare system that works for everyone, not just the few who profit from it.

All of these industries have a vested interest in keeping the healthcare system complex and expensive.

Why is US healthcare so bad?

The Harvard Business Review Nails It:

“We still live in a world where the larger portion of hospitals’ beds that are utilized, the more they get paid. Consequently, the U.S. health system is focused on treating sickness rather than preventing illness in the first place. Unless we replace volume-based, fee-for-service reimbursement with a capitation model that pays providers a fixed amount per member per month and is tied to health outcomes, hospital leaders will still have no incentive to keep people out of hospitals”

Here’s one of the main drivers of the high costs of health care. From ifunny.co

ifunny.co

Misaligned Incentives

Like more of our biggest problems, the cause of the bulk of the problems with health care reflects misaligned incentives. Our incentives don’t reward health, they reward “treatment” – tests and more and more visits.

Kidney Dialysis
If you’re tired of reading, John Oliver did a great bit on Kidney dialysis that’s indicative of the sector at large.

It’s about 20 minutes long which I know is a lot in these distracted times, but if you want to understand the real cost driving up health care I can’t recommend it enough.

Medical Provider Costs

The prices for procedures and visits to the doctor are much higher than in other developed countries. The United States has some of the most advanced medical technology in the world. This technology is very expensive to develop and maintain.

Doctors in the United States are paid more than doctors in other countries. This is because the United States has a higher standard of living than other countries.

The high cost of medical care is a major problem for the United States. It is one of the reasons why the country has such a high level of debt.

Despite significant pushback from providers, Trump passed a rule making providers publish prices, but it didn’t help. It’s still an incomprehensible mess:

“The posted prices are fanciful, inflated, difficult to decode and inconsistent, so it’s hard to see how an average person would find them useful.”

Jeanne Pinder, the founder, and chief executive of Clear Health Costs, a consumer health research organization.

There are Not Enough Doctors, Especially in Poorer Areas

Another big problem is that there are simply not enough doctors to go around. This lack of access is especially pronounced in poorer areas, where residents often have to travel long distances for basic care. The doctors we do have are overworked and stretched thin, running from patient to patient. Care suffers. The lack of doctors results in longer wait times and worse overall care.

Preventive Care Suffers

The lack of doctors also means that people don’t get preventive care. This lack of preventive care can lead to serious health problems down the road. For example, someone who doesn’t get a routine breast exam might not find out they have breast cancer until it’s too late.

Emergency Room Visits

Among the main drivers of healthcare expenditures are the number of people who visit the emergency room. The lack of access to doctors is one of the reasons why people don’t get the care they need sooner. When people can’t see a doctor, they often end up going to the emergency room for minor ailments. And people who can’t afford healthcare or don’t have health insurance often put off care, and end up going to the emergency department, where we all pay. This not only clogs up ERs but also drives up costs.

Emergency Room Costs

It is considerably more expensive to receive medical treatment in a hospital than at a doctor’s office. A trip to the ER can cost hundreds or even thousands of dollars, which is an astronomical amount of money for many people, a sum many can’t pay. And when others rack up medical bills they don’t pay for, we get stuck with the bill. Remember hospitals can’t deny care in many cases.

Our Limited Understanding of the Human Body

Another aspect to keep in mind is that the medical profession can only do so much. Vast areas of the human body in general and health in particular are still a misery.

Health care is tricky. More health might not help. And when you do receive care, you can never be sure that the care helped.

 

Insurance Companies

If an insurance company wants to save money, you’d think they would want us healthy and out of the hospital. But that’s not what they do. Some incentives reward insurance companies when the cost of care increases.

Contracts with insurers allow hospitals to hide prices from consumers, add fees and discourage the use of less-expensive rivals – Behind Your Rising Health-Care Bills: Secret Hospital Deals That Squelch Competition.

Insurance companies make more when they don’t pay. That’s why costs keep going up for worse care. Why we pay through the teeth for bad results.

It’s a labyrinth of complexity only King Minos could love.

Insurance Companies WANT Higher Costs

Higher prices mean there’s more for them to skim off the top, their whole business model. They just charge more. You have to get insurance, if prices are all going up, your competitor’s prices go up. And profits just go up.

Health Insurance Hustle: High Prices Can Boost Profits (NPR):

Here are the highlights from this frustrating story from NPR:

“You would think that health insurers would make money, in part, by reducing how much they spend.

“Turns out, insurers don’t have to decrease spending to make money. They just have to accurately predict how much the people they insure will cost. That way they can set premiums to cover those costs — adding about 20 percent for their administration and profit. If they’re right, they make money. If they’re wrong, they lose money. But, they aren’t too worried if they guess wrong. They can usually cover losses by raising rates the following year.

“Experts frequently blame this on the high prices charged by doctors and hospitals. But less scrutinized is the role insurance companies — the middlemen between patients and those providers — play in boosting our health care tab. Widely perceived as fierce guardians of health care dollars, insurers, in many cases, aren’t. In fact, they often agree to pay high prices, then, one way or another, pass those high prices on to patients — all while raking in healthy profits.

Frank found himself in a standoff familiar to many patients. The hospital and insurance company had agreed on a price, and he was required to help pay it. It’s a three-party transaction in which only two of the parties know how the totals are tallied.

Link to NPR.

 

Did you know: Employers paying for insurance is more or less a fluke

I took this from Why Going to the Doctor Sucks post from Wait But Why

“About half of all Americans receive health insurance through their employer. This strange custom is a remnant of the Stabilization Act of 1942, which froze wages and salaries for all the country’s workers. Looking for new ways to attract workers during the wartime labor shortage, employers started offering better health insurance, a loophole that was allowed to increase over time by “a reasonable amount.”

 

Drug Companies

Drug Companies can charge whatever they want for their drugs. They know that people will pay anything to stay alive or to keep a loved one alive. This is price gouging and it’s immoral.

The high cost of drugs is a major factor in the high cost of health care. It’s not just the insurance companies and the hospitals that are to blame, it’s also the drug companies.

The High Cost of Drugs

What’s the deal with the high cost of drugs? I mean, why does medicine cost so much? Americans spend more on drugs than any other country, and prices have been rising steadily for years. In 2018, spending on prescription drugs reached $333 billion, or about $1000 per person.

Why do drugs cost so much?

There are many reasons why drugs cost so much. It’s a complicated healthcare system we have and there are all kinds of perverse incentives at play.

One reason is that the FDA approval process is very costly and time-consuming. It can cost over a billion dollars to get a new drug approved, and it often takes over a decade. This high cost and lengthy approval process deter many companies from developing new drugs. Instead of putting in the hard work to make lives better, they concentrate on legal shenanigans to squeeze as much as they can.

Another reason for high drug prices is that the U.S. government doesn’t regulate drug prices as it does in other countries. In most developed nations, the government negotiates with drug companies to get lower prices for its citizens. But in the United States, Medicare and Medicaid are not allowed to negotiate with pharmaceutical companies. It’s hard to say how much it would drive down costs, but competition is always a good thing, right?

Here are More Reasons Drugs are so Expensive:

  • The free market. Companies will charge as much as they can. The high cost of drugs is often passed on to consumers.
  • Drug manufacturers sometimes price their products high in an attempt to recoup losses from other parts of their business.
  • Pharmaceutical companies have to pay for expensive research and development costs.
  • High manufacturing costs.
  • Drug prices are often influenced by third-party payers, such as insurance companies and government health programs.
  • Some drugs cost more because they’re better than other options.
  • Patent protection gives pharmaceutical companies a monopoly on specific drugs, allowing them to charge high prices.
  • The high cost of advertising and marketing drugs.
  • There is a lack of price transparency in the healthcare system.
  • Countries with socialized medicine often set lower prices for drugs than we do in the US.
  • Raw materials.
  • Government policies and regulations.
  • Clinical trial costs.
  • Regulatory compliance.
  • Overhead costs – including HR, advertising, lobbying, etc.

The high cost of drugs is a major issue and it’s something that needs to be addressed. We need to find ways to bring down the cost of medication so that it’s more affordable for everyone. This is a critical issue and it’s one that we can’t afford to ignore.

Medicare and Medicaid

Medicare and Medicaid are a big reason why health care is so screwed up. They create all kinds of perverse incentives.

One of the biggest reasons why Medicare costs so much is because of the way it reimburses providers. Medicare reimbursements are often based on the number of services provided, not on whether those services improve health. This creates a lot of waste and inefficiency in the system and drives up costs for everyone.

Another big reason for the high cost of health care is the way that hospitals and other providers charge for their services. They often use a system called “chargemaster pricing,” which means that they come up with arbitrarily high prices for their services, and then negotiate discounts with insurers. This drives up costs for everyone because it’s based on the principle of “charge what the market will bear.”

Additionally, Medicaid rebates only apply to brand-name drugs, so there’s an incentive to keep prices high for those drugs.

And because those two programs account for a huge chunk of all healthcare spending, that means the entire system is skewed in favor of quantity over quality.

Because they are run by the government, and the government isn’t good at stuff, these programs drive up the costs for everyone.

It comes back to the Government Being Broken

The government is broken and since our politicians are bought and paid for by those getting wealthier and wealthier from the broken system, there’s no pressure to bring costs down.

The Structure of Our Society

While all of these play a part in run-away costs, the real causes are structural. The high prices reflect the incentives in our economy.

They are a result of so many of the deep, structural problems we are facing that affect not just healthcare costs but the country as a whole.

A paralyzed government

The government is paralyzed by gridlock, division, and inaction. Congress is unable to pass laws and the executive branch is unable to implement policies. They just don’t do much to bring down the costs – Federal Spending is out of control. Even when they try, the effects are muted.

Our Politicians are Bought and Don’t do Anything

Because of the huge amounts of money that corporations and the wealthy can throw at candidates, our elected officials are often bought and paid for. They don’t do anything to help the average person, because they’re more interested in helping their wealthy donors. The influence of money in Washington results in policies that benefit the rich and powerful.

It’s no wonder that so many Americans are cynical about politics. We see our politicians making deals with irresponsible corporations, Big Pharma, the corrupt finance industry, and other special interests, while the needs of regular people are ignored. It’s time for a change. The system is rigged and it’s hard to see how things will ever change.

The Media and Lobbying

Drug companies are some of the biggest spenders in two of our most important problems, the compromised media, and lobbying. With their advertising and lobbying dollars, drug companies wield enormous power in the country. They influence legislation as well as public opinion to thwart efforts to reform health care.

Sugar Lobby and USDA Dietary Guidelines

For a transparent example of how lobbying dollars directly affect health, take a look at the sugar lobby and the 2020 – 2025 USDA Dietary Guidelines:

“in December, the U.S. Department of Agriculture (USDA), supported by the Department of Health and Human Services, endorsed high sugar levels in the “2020-2025 Dietary Guidelines for Americans,” ignoring the 835-page report by their scientific advisory committee that recommended that daily calories from sugar be lowered from 10 percent to 6 percent of the diet.

The USDA lawyers stated that there was “insufficient scientific evidence” to reduce guidance on sugar levels — language sadly similar to the cigarette industry several decades ago.

It could well have been written by the sugar industry and processed food lobbyists pushing sugar-laced cereals, desserts, drinks and other sweetened foods. The fact is that scientific evidence is overwhelming and their decision has shown that they cannot be trusted as honest brokers in advising Americans on nutrition.”

Casey Means, M.D., associate editor of the International Journal of Disease Reversal and Prevention writing in The Hill.

That number is missing for a reason, and it’s not because they don’t know what’s healthy.

Sugar is Sugar

Lobbyists created this distinction to hide the poison they are feeding consumers. Biologically, in terms of how your body breaks down and absorbs sugar, there isn’t much difference between added and so-called “natural” sugar. See how they added “nutritious” to the total sugar part? That’s just like “fruit juice” which is mostly sugar. It might come from an apple but chemically it’s very similar to white sugar. It’s just as bad for your body. At least if you eat an apple you get some fiber and other stuff. With juice, it’s just sugar. This is truly shameful stuff here.

Of course, the media doesn’t report on this and nobody is held to account. But nonsense like this not only affects the health of millions of people, but it also drives more profits to the worst corporate actors out there.

 

The Media

When drug companies and political campaigns represent the bulk of advertisers, is it any wonder the media isn’t interested in reform? If drug companies and political spending go down, so do their profits. The media is at the mercy of drug companies, one of the sectors that spend the most on advertising. And if we fixed Medicare, what would the negative ads targeted to seniors say?

The media is compromised and doesn’t do its job in holding these institutions accountable.

What Can we do to Bring Down Costs?

The two most important ways we can do to improve the healthcare system are to bring costs down and improve our overall health. It’s pretty simple really.

Here’s a look at accomplishing those things.

Value-Based Care Can Remake the Health Care System

Value-Based Care Can Remake the Health Care System

Value-based care is a way to overhaul the broken US healthcare system. The goal is to shift the focus of the healthcare industry from volume to value and make it
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